The news release states: "The contract is valued at approximately USD$6.9 million provided that all goods and services are delivered over the eight year term of the agreement."
That's $9.3 million CDN. If over 8 years, that's an average of $1.176 million per year, for 13 installs. If the UK Met deal expands to the two airlines and 30 installs as publicized by UK Met, that extends to $2.713 million per year.
I don't recall there being a set number of installs for a given agency for the five Met agencies worldwide FLYHT was targeting in the $2-$3 million revenue range. I think FLYHT was just trying to express what kind of annual revenue might come from weather data long-term.
Keep in mind that, once the installs are done (at, say, the typical hardware profit margin of 50% to 60%), the SaaS profit margin could reach or exceed 80%. (This is probably a point of sensitivity.) I would think a sensor like the WVSS-II would require maintenance (cleaning, recalibration, element replacing), unlike an Iridium antenna or even AFIRS itself. This must be factored in somehow, so it won't be all SaaS. Maybe that will go to Loganair - free data, maintenance fees, and a step closer to accomplishing their eco-goals.
Not sure how FLYHT partner Synoptic fits as a middle man when FLYHT may be dealing with a Met office directly. I believe that their job was to take raw collected data and "package" it for Met office consumption, then find the market for it and manage the accounting. In this case, UK Met is the client and they may want to handle packaging and re-sale as a way of disseminating costs.
What I find interesting is the potential number of installs of the sensor coupled with the Edge for realtime reporting. UK Met is taking 30 for a territory their size, is that just to start with? Is there a point of no return, no further benefit, when a saturation point is reached?
The U.S. currently has 139 WVSS-II installs (presumably done by SpectraSensors before FLYHT bought the product from them), how many more would NOAA say is optimal? And what of the Edge or AFIRS for realtime for their existing installations?
How many would a country like China need? Or the EU? Or Africa as a region? SE Asia? The Middle East? Australia? South America? Is it really only five Met agencies or are we talking about worldwide coverage? I don't think there is any other (or better) way to detect changes in water vapour in the atmosphere than by sampling it directly.
Int. CEO KJ, Q2 2023 CC: "
The other agencies around the world, the other primary weather agencies around the world are very much waiting to see how the process with UK Met and NOAA fall out. So as we as we complete those deals with UK Met and NOAA, we expect other agencies to definitely pay attention and we think it's a huge opportunity for us moving forward."
As to the latter part of the announcement, "
which could extend to 2037 that would bring the value to £7 million", I discounted it. Why in
£? Why 2037?
It is too far out to be concerned about whatever the intention.
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What does the WVSS-II do?
NOAA:
"The Water Vapor Sensing System (WVSS II) sensor, contained in a cigar box-sized housing, consists of a diode laser which samples the air and reports environmental humidity to meteorologists every six seconds." I asked ChatGPT about water vapour testing. "Is testing water vapour important?"
ChatGPT:
Yes, testing water vapor is important in meteorology and atmospheric science for several reasons. Water vapor is a significant component of Earth's atmosphere and plays a crucial role in weather and climate processes. Monitoring and understanding water vapor levels are essential for accurate weather forecasting, climate studies, and predicting extreme weather events. Here are some key reasons why testing water vapor is important:
Weather Prediction: Water vapor is a major driver of weather patterns and changes. Its distribution in the atmosphere affects cloud formation, precipitation, humidity, and temperature. Accurate measurements of water vapor levels help meteorologists predict and understand weather phenomena like rain, snow, thunderstorms, and hurricanes.
Atmospheric Stability: Water vapor affects atmospheric stability. Changes in water vapor content can influence the development of cloud layers and the potential for precipitation. Monitoring water vapor can provide insights into the likelihood of weather events and their intensity.
Climate Studies: Water vapor is a greenhouse gas, and its concentration in the atmosphere affects the Earth's energy balance. Monitoring long-term changes in water vapor is crucial for studying the Earth's climate and understanding how it responds to various factors, including human activities.
Hydrological Cycle: Water vapor is a key component of the hydrological cycle, which includes processes like evaporation, condensation, and precipitation. Understanding water vapor transport helps scientists study the movement of water between the atmosphere, oceans, land, and ice.
Weather Extremes: High water vapor levels can lead to heavy rainfall, flooding, and severe weather events. Monitoring water vapor levels can help predict and prepare for these events, reducing their impact on communities.
Satellite Observations: Satellites equipped with sensors that can measure water vapor play a critical role in monitoring atmospheric conditions. These observations contribute to more accurate weather forecasts and climate models.
Aviation and Transportation: Water vapor affects air density and air pressure, which in turn influence aircraft performance. Accurate water vapor measurements are important for aviation safety and efficiency.
Weather Research: Water vapor measurements are valuable for research into atmospheric processes, including cloud physics, aerosol interactions, and the overall behavior of the atmosphere.
In summary, water vapor is a dynamic and essential component of Earth's atmosphere, impacting weather, climate, and various environmental processes. Accurate measurements and monitoring of water vapor levels are integral to understanding atmospheric behavior and making informed predictions about weather and climate conditions.
A note about satellite observations... I would think that direct sampling would be more accurate, and the number of samples ("every six seconds" during potentially innumerous flights) would outweigh the opportunities and expense of satellite observations. While satellites do cover the globe completely, the weather data we would most want would coincide with the areas planes most fly.
A note on Aviation and Transportation: This description indicates how airlines like Loganair can use the data to fly more safely and efficiently.